(6) Why does the company have preferred stock outstanding? (7) Based on information provided in PepsiCo's Consolidated Statement of Equity (Exhibit 5), its preferred stock account was affected by three separate events during 2018, including the redemption, conversion, and retirement. Please complete the following journal entries made by PepsiCo to record these events. (Hint: The account of "Repurchased Preferred Stock" is essentially the account of "Treasury stock" we cover in class.) (i Repurchased Preferred Stock (a) Cash (a) (ii) Preferred Stock (b) Common Stock at par 0 million (d) (c) (iii) Preferred Stock (e) (f) Repurchased Preferred Stock (g) (h) Exhibit 5 Shareholders' Equity at Pepsi Co Consolidated Statement of Equity (in millions 2016 2018 2017 Shares Amount Shares Amount Shares Amount Preferred Stock Balance, beginning of year 0.8 41 0.8 0.8 $ 41 41 Conversion to common stock (0.1) (6) Retirement of preferred stock (0.7) (35) Balance, end of year 0.8 41 0.8 41 Repurchased Preferred Stock Balance, beginning of year Redemptions (0.7) (197) (0.7) (192) (0.7) (186) (2) (5) (6) Retirement of preferred stock 0.7 199 Balance, end of year (192 (0.7) (197) (0.7) Common Stock Balance, beginning of year 1,420 24 1,428 24 1,448 24 Share issued in connection with preferred stock conversion to 1 common stock Change in repurchased common stock Balance, end of year (12) (1) (8) (20) 1,409 23 1.420 24 1,428 24 Capital in Excess of Par Value Balance, beginning of year Share-based compensation expense 3,996 4,091 4,076 250 290 289 Equity issued in connection with preferred stock conversion to 6 common stock Stock option exercises, RSUS, PSUS and PEPunits converted 4) (138) (193) (236) (130 Withholding tax on RSUS, PSUS and PEPunits converted (103) (145) (3) (4) Other (6) Balance, end of year 3,953 3,996 4,091 Retained Earnings Balance, beginning of year Cumulative effect of accounting changes Net income attributable to PepsiCo 52,839 52,518 50,472 (145) 12,515 4,857 6,329 Cash dividends declared common b) (5,098) (4,536) (4,282) Cash dividends declared - preferred (1) Retirement of preferred stock (164) Balance, end of year Accumulated Other Comprehensive Loss 59,947 52,839 52,518 (13,919) (13,319) Balance, beginning of year (13,057) Other comprehensive (loss)/income attributable to Pepsi Co Balance, end of year (2,062) 862 (600) (13,919 (15,119) (13,057)